Descriptive Analysis

Overview

The following document provides an initial descriptive analysis and data coverage overview of the [Annual Survey of State and Local Government Finances. The data is provided in a standardised format from Willamette University. The data is available at a county level between 1970 - 2020 with improved coverage in more recent years. The data has been cleaned and grouped into 17 expenditure categories (listed in data tree below), 4 higher-level categories (comprised of the 17 lower-level categories), and as a county-level total expenditure. All plots are presented using the raw data, whereas the tables presenting the linear time trend results include results for both the raw data and linearly interpolated data.

Expenditure categories

The data is currently structured in county-year pairs with observations for 17 public expenditure categories. I have manually grouped these 17 categories into 4 higher categories (that can be changed/redefined easily!). The tree structure below displays all categories and groupings. As currently thought out, any or a combination of these categories will serve as outcome/dependent variables.

##                                     levelName
## 1  Total Public Expenditure                  
## 2   ¦--Commercial                            
## 3   ¦   ¦--Air Transportation                
## 4   ¦   ¦--Liquor Stores                     
## 5   ¦   °--Port Facilities                   
## 6   ¦--Public Welfare, Services & Facilities 
## 7   ¦   ¦--Education                         
## 8   ¦   ¦--Fire Protection                   
## 9   ¦   ¦--Health & Hospitals                
## 10  ¦   ¦--Housing & Community Development   
## 11  ¦   ¦--Public Services & Facilities      
## 12  ¦   ¦--Public Transit                    
## 13  ¦   ¦--Public Welfare                    
## 14  ¦   °--Retirement                        
## 15  ¦--Administration & Misc.                
## 16  ¦   ¦--General Administration            
## 17  ¦   ¦--Interest on Debt                  
## 18  ¦   °--NEC                               
## 19  °--Infrastructure, Utilities & Regulation
## 20      ¦--Highways                          
## 21      ¦--Police, Corrections & Judicial    
## 22      ¦--Protective Inspection & Regulation
## 23      ¦--Utilities                         
## 24      °--Waste Management & Sewerage

Overview Plots

The below plots provide aggregated geographical (national, state, regional) summaries of expenditure categories and shares to demonstrate the composition of national expenditure across the categories. The final two plots demonstrate the composition of expenditure within the Public Welfare, Services & Facilities category.

Data Coverage

One of the issues reported by the data collectors is that the surveys are only mandatory every 5 years. So, although data exists and is reported annually, there are several counties that do not report figures in many years. 30% of the panel values are missing due to this. I am unsure what to do with this information and whether there might be any fixes. Climate Econometrics uses indicator saturation to fill in missing values which I would be interested to try but I do not yet know if this is appropriate for this dataset (especially on outcome variables). In the below charts, I have provided a map that shows the proportion of each county’s time series (1970-2020) that is missing. States outlined in red are top fossil-fuel producing states (Texas, Pennsylvania, Oklahoma, Wyoming, West Virginia, North Dakota, Nevada, New Mexico, Louisiana, Colorado).

Analysis of Time Trends

Panel Linear Time Trends

The following tables provide standard linear time trends evaluated in a county-fixed effects panel linear regression model for a panel of 3,058 counties and for a time period of 1970-2020.
Dependent variables: Expenditure by category per capita values.
Data: Raw data and linearly interpolated data (likely a flawed method).

Result: Per capita expenditure does follow an increasing trend albeit very small and not in line with growth in personal income rates (Pinc K below).

Note: Amount pc denotes total public expenditure and Pinc K denotes personal income per capita (as GDP indicators are not available for the full duration of the panel).

	Expenditure PC
Outcome Variable	Raw Data	Lin. Interpol.
Commercial	0.07***	0.08***
	0.01	0.01
Public Welfare Services Facilities	1.22***	1.78***
	0.04	0.05
Administration Misc	1.42***	2.18***
	0.06	0.07
Infrastructure Utilities Regulation	1.44***	2.25***
	0.04	0.04
Pinc K	878.69***	880.19***
	4.37	4.39

	Expenditure (per capita)
Outcome Variable	Raw Data	Lin. Interpol.
Amount Pc	33***	31.72***
	0.63	0.6

Spatial Variation: Linear Time Trends

The below shows spatial distribution of trends in personal income, total direct expenditure, and expenditure (all in per capita values) in our four broad categories (trend values calculated in a linear time series model). These graphs show variation in the linear trends across counties.

Preliminary Shift-Share Treatment Results

Preliminary model results making use of shift-share instruments in employment and wage changes coming from coal, extraction, and oil & gas industries.

The models below use a 2SLS approach using the shift-share as an instrument for changes in employment and wages per industry per county. Each model employs county- and year-fixed effects with two-way clustering of the standard errors.

The first section uses overall public expenditure as a dependent variable. The second section breaks this expenditure down into the four categories mentioned above.

Next steps:
- Reconsider control variables beyond county-level personal income.
- Replace personal income with GDP now that time series is shortened as a consequence of data availability in the shift-share instrument).
- Experiment with different lags of the independent variable (currently assumes same-period change).
- Experiment with different base years for the shift-share instrument (currently constructed from base year 2001).

Overall Public Expenditure

##                                                .
## Dependent Var.:               Tot. Pub. Exp (PC)
##                                                 
## fd_total_annual_wages_2121_k -1.2e-12 (4.86e-12)
## Personal Income (pc_k)           0.0040 (0.0166)
## Fixed-Effects:               -------------------
## fips                                         Yes
## year                                         Yes
## ____________________________ ___________________
## S.E.: Clustered                  by: fips & year
## Observations                                 398
## R2                                       0.93926
## Within R2                                0.00733
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1

## [1] "TOTAL PUBLIC EXPENDITURE (PC)"

##                                 wage_coal     wage_extraction
## Dependent Var.:        Tot. Pub. Exp (PC)  Tot. Pub. Exp (PC)
##                                                              
## Wage Coal (FD)          -1.2e-9 (4.86e-9)                    
## Wage Extract. (FD)                        -8.39e-9. (4.17e-9)
## Wage O&G (FD)                                                
## Emp. Coal (FD)                                               
## Emp. Extract. (FD)                                           
## Emp. O&G (FD)                                                
## Personal Income (pc_k)    0.0040 (0.0166)    0.0232* (0.0081)
## Fixed-Effects:         ------------------ -------------------
## fips                                  Yes                 Yes
## year                                  Yes                 Yes
## ______________________ __________________ ___________________
## S.E.: Clustered           by: fips & year     by: fips & year
## Observations                          398              16,773
## R2                                0.93926             0.90700
## Within R2                         0.00733            -0.88842
## 
##                              wage_oil_gas           emp_coal     emp_extraction
## Dependent Var.:        Tot. Pub. Exp (PC) Tot. Pub. Exp (PC) Tot. Pub. Exp (PC)
##                                                                                
## Wage Coal (FD)                                                                 
## Wage Extract. (FD)                                                             
## Wage O&G (FD)             -4e-9 (6.17e-9)                                      
## Emp. Coal (FD)                             -5.03e-5 (0.0006)                   
## Emp. Extract. (FD)                                            -0.0009. (0.0005)
## Emp. O&G (FD)                                                                  
## Personal Income (pc_k)   0.0131. (0.0065)    0.0037 (0.0168)   0.0227* (0.0082)
## Fixed-Effects:         ------------------ ------------------ ------------------
## fips                                  Yes                Yes                Yes
## year                                  Yes                Yes                Yes
## ______________________ __________________ __________________ __________________
## S.E.: Clustered           by: fips & year    by: fips & year    by: fips & year
## Observations                        2,668                398             16,773
## R2                                0.72569            0.93897            0.93384
## Within R2                        -0.88339            0.00270           -0.34351
## 
##                               emp_oil_gas
## Dependent Var.:        Tot. Pub. Exp (PC)
##                                          
## Wage Coal (FD)                           
## Wage Extract. (FD)                       
## Wage O&G (FD)                            
## Emp. Coal (FD)                           
## Emp. Extract. (FD)                       
## Emp. O&G (FD)             -0.1110 (10.28)
## Personal Income (pc_k)     0.1029 (8.396)
## Fixed-Effects:         ------------------
## fips                                  Yes
## year                                  Yes
## ______________________ __________________
## S.E.: Clustered           by: fips & year
## Observations                        2,668
## R2                               -1,720.6
## Within R2                       -11,819.1
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1

Granular Categories

## [1] "ADMINISTRATION & MISC EXPENDITURE (PC)"

##                        wage_coal_admin.. wage_extraction.. wage_oil_gas_adm..
## Dependent Var.:               Admin&Misc        Admin&Misc         Admin&Misc
##                                                                              
## Wage Coal (FD)         6.51e-8 (3.79e-7)                                     
## Wage Extract. (FD)                       1.98e-7 (3.56e-7)                   
## Wage O&G (FD)                                              -1.38e-6 (1.93e-6)
## Emp. Coal (FD)                                                               
## Emp. Extract. (FD)                                                           
## Emp. O&G (FD)                                                                
## Personal Income (pc_k)     1.554 (1.362)   0.5644 (0.6249)     1.433 (0.8295)
## Fixed-Effects:         ----------------- ----------------- ------------------
## fips                                 Yes               Yes                Yes
## year                                 Yes               Yes                Yes
## ______________________ _________________ _________________ __________________
## S.E.: Clustered          by: fips & year   by: fips & year    by: fips & year
## Observations                         398            16,773              2,668
## R2                               0.81607           0.89983            -1.2068
## Within R2                        0.01028          -0.01798            -5.7039
## 
##                        emp_coal_admin.. emp_extractio.. emp_oil_gas_ad..
## Dependent Var.:              Admin&Misc      Admin&Misc       Admin&Misc
##                                                                         
## Wage Coal (FD)                                                          
## Wage Extract. (FD)                                                      
## Wage O&G (FD)                                                           
## Emp. Coal (FD)         -0.0027 (0.0455)                                 
## Emp. Extract. (FD)                      0.0474 (0.0566)                 
## Emp. O&G (FD)                                           -46.49 (4,316.3)
## Personal Income (pc_k)    1.576 (1.336) 0.4001 (0.6907)  39.08 (3,525.4)
## Fixed-Effects:         ---------------- --------------- ----------------
## fips                                Yes             Yes              Yes
## year                                Yes             Yes              Yes
## ______________________ ________________ _______________ ________________
## S.E.: Clustered         by: fips & year by: fips & year  by: fips & year
## Observations                        398          16,773            2,668
## R2                              0.81550         0.89755        -35,491.7
## Within R2                       0.00719        -0.04118       -107,819.4
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1

## [1] "COMMERCIAL EXPENDITURE (PC)"

##                        wage_coal_comme.. wage_extraction_c.. wage_oil_gas_com..
## Dependent Var.:               Commercial          Commercial         Commercial
##                                                                                
## Wage Coal (FD)         -1.4e-7 (9.36e-8)                                       
## Wage Extract. (FD)                       -6.1e-8** (2.09e-8)                   
## Wage O&G (FD)                                                -1.13e-7 (1.61e-7)
## Emp. Coal (FD)                                                                 
## Emp. Extract. (FD)                                                             
## Emp. O&G (FD)                                                                  
## Personal Income (pc_k)  -0.0727 (0.2581)    0.2651. (0.1508)    0.0351 (0.0754)
## Fixed-Effects:         ----------------- ------------------- ------------------
## fips                                 Yes                 Yes                Yes
## year                                 Yes                 Yes                Yes
## ______________________ _________________ ___________________ __________________
## S.E.: Clustered          by: fips & year     by: fips & year    by: fips & year
## Observations                         398              16,773              2,668
## R2                               0.72534             0.66822            0.74776
## Within R2                       -0.08193            -0.06970            -2.3123
## 
##                        emp_coal_comme.. emp_extraction..  emp_oil_gas_..
## Dependent Var.:              Commercial       Commercial      Commercial
##                                                                         
## Wage Coal (FD)                                                          
## Wage Extract. (FD)                                                      
## Wage O&G (FD)                                                           
## Emp. Coal (FD)         -0.0162 (0.0135)                                 
## Emp. Extract. (FD)                      -0.0059 (0.0039)                
## Emp. O&G (FD)                                             -2.343 (217.9)
## Personal Income (pc_k) -0.0925 (0.2735)  0.2569 (0.1599)   1.922 (178.0)
## Fixed-Effects:         ---------------- ----------------  --------------
## fips                                Yes              Yes             Yes
## year                                Yes              Yes             Yes
## ______________________ ________________ ________________  ______________
## S.E.: Clustered         by: fips & year  by: fips & year by: fips & year
## Observations                        398           16,773           2,668
## R2                              0.68133          0.68376        -1,269.4
## Within R2                      -0.25527         -0.01960       -16,680.6
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1

## [1] "INFRASTRUCTURE, UTILITIES & REGULATION (PC)"

##                        wage_coal_infra.. wage_extraction.. wage_oil_gas_inf..
## Dependent Var.:            Infr,Util,Reg     Infr,Util,Reg      Infr,Util,Reg
##                                                                              
## Wage Coal (FD)         -4.76e-7 (3.8e-7)                                     
## Wage Extract. (FD)                       -8.4e-7 (5.13e-7)                   
## Wage O&G (FD)                                              -5.42e-7 (7.24e-7)
## Emp. Coal (FD)                                                               
## Emp. Extract. (FD)                                                           
## Emp. O&G (FD)                                                                
## Personal Income (pc_k)   -0.6346 (1.336)    2.318. (1.107)    0.7334 (0.4821)
## Fixed-Effects:         ----------------- ----------------- ------------------
## fips                                 Yes               Yes                Yes
## year                                 Yes               Yes                Yes
## ______________________ _________________ _________________ __________________
## S.E.: Clustered          by: fips & year   by: fips & year    by: fips & year
## Observations                         398            16,773              2,668
## R2                               0.83159           0.79499            0.11278
## Within R2                       -0.02155          -0.95988            -4.1785
## 
##                        emp_coal_infra.. emp_extraction.. emp_oil_gas_in..
## Dependent Var.:           Infr,Util,Reg    Infr,Util,Reg    Infr,Util,Reg
##                                                                          
## Wage Coal (FD)                                                           
## Wage Extract. (FD)                                                       
## Wage O&G (FD)                                                            
## Emp. Coal (FD)         -0.0445 (0.0411)                                  
## Emp. Extract. (FD)                      -0.0978 (0.0655)                 
## Emp. O&G (FD)                                            -22.96 (2,133.4)
## Personal Income (pc_k)  -0.7148 (1.365)   2.316. (1.137)  19.35 (1,742.5)
## Fixed-Effects:         ---------------- ---------------- ----------------
## fips                                Yes              Yes              Yes
## year                                Yes              Yes              Yes
## ______________________ ________________ ________________ ________________
## S.E.: Clustered         by: fips & year  by: fips & year  by: fips & year
## Observations                        398           16,773            2,668
## R2                              0.82568          0.85104        -21,547.2
## Within R2                      -0.05742         -0.42403       -125,771.8
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1

## [1] "PUBLIC WELFARE, SERVICES & FACILITIES (PC)"

##                        wage_coal_publi.. wage_extraction_.. wage_oil_gas_pu..
## Dependent Var.:          Welf,Serv,Facil    Welf,Serv,Facil   Welf,Serv,Facil
##                                                                              
## Wage Coal (FD)         2.76e-7 (5.05e-7)                                     
## Wage Extract. (FD)                       -5.83e-7. (3.1e-7)                  
## Wage O&G (FD)                                               3.63e-7 (6.16e-7)
## Emp. Coal (FD)                                                               
## Emp. Extract. (FD)                                                           
## Emp. O&G (FD)                                                                
## Personal Income (pc_k)   -0.7110 (1.802)    1.203* (0.4710)   0.7003 (0.5310)
## Fixed-Effects:         ----------------- ------------------ -----------------
## fips                                 Yes                Yes               Yes
## year                                 Yes                Yes               Yes
## ______________________ _________________ __________________ _________________
## S.E.: Clustered          by: fips & year    by: fips & year   by: fips & year
## Observations                         398             16,773             2,668
## R2                               0.94857            0.85709           0.74404
## Within R2                       -0.02770           -0.55028          -0.97014
## 
##                        emp_coal_publ.. emp_extraction_.. emp_oil_gas_pu..
## Dependent Var.:        Welf,Serv,Facil   Welf,Serv,Facil  Welf,Serv,Facil
##                                                                          
## Wage Coal (FD)                                                           
## Wage Extract. (FD)                                                       
## Wage O&G (FD)                                                            
## Emp. Coal (FD)         0.0410 (0.0656)                                   
## Emp. Extract. (FD)                     -0.0695. (0.0400)                 
## Emp. O&G (FD)                                             20.43 (1,901.7)
## Personal Income (pc_k) -0.6836 (1.846)   1.213* (0.4964) -15.90 (1,553.2)
## Fixed-Effects:         --------------- ----------------- ----------------
## fips                               Yes               Yes              Yes
## year                               Yes               Yes              Yes
## ______________________ _______________ _________________ ________________
## S.E.: Clustered        by: fips & year   by: fips & year  by: fips & year
## Observations                       398            16,773            2,668
## R2                             0.94734           0.88302         -6,433.1
## Within R2                     -0.05211          -0.26906        -49,522.7
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1